I'am an huge fan of Japanese anime and i do prefer watching my movies and series in their native language with subs. Yesterday i was checking the market for the Holy grail and after 4 hours i finally found the solution.

So after installing and checked every player in the market i finally found the only player that can play BD Rip 720p (1280x720) with subs (srt & ssa) function with hardware acceleration.

I tested all the Free and priced application and i can tell for sure that many of those one don't play MKV and need optimization and work on hardware acceleration:

RockPlayer (pro) 1.7.2 : Laggy, don't load subtitles, glitch/pixelation/macroblock depending on the video.
No support for hardware acceleration for Xperia Play use software mode to play the video.
Good Menu and options
Move to SD

Vplayer 0.9.4 (unlocker): Buggy, laggy, don't load subtitles inside MKV incremented, glitch/pixelation/macroblock depending on the video.
No support for hardware acceleration for Xperia Play use software mode to play the video.
Move to SD

Best video Player : Might be the same as above with a different name Not tested...

VLC direct pro: Streaming load movies and video from computer...
Forget about it...
VitalPlayer 1.2.7 (Pro): Play fine with little lag in software mode, don't load subtitles inside MKV. (UTF 8 not supported ?) glitch/pixelation/macroblock depending on the video.
No support for hardware acceleration for Xperia Play use software mode to play the video.
Good option and menu but ugly interface
Move to SD

MvideoPlayer 2.8.2 : This app is weird cause it says that it DOES ONLY PLAY WHAT YOUR PHONE ALREADY SUPPORTS... but to tell you the truth what the purpose of a player if it plays what you have already.
Don't load any MKV on Xperia Play
No support for hardware acceleration for Xperia Play use software mode to play the video.
Good interface.
Move to SD

QQplayer 1.0.152: One of the best player i tested using Software acceleration - in fact this player can play everything i tried with some little lag at starts but really the subtitles are working with some errors on opening in Anime but everything works fine when you are watching the episode.
Many usefull option and simple interface.
No support for hardware acceleration for Xperia Play use software mode to play the video.
Move to SD (really small size)

ArcMedia 1.5 (pro): What! No app2SD! Big! Don't waste my time ! Not tested
MoboPlayer v1.2.145 Free; This player is awesome, great interface can play everything smoothly, Move to SD small size in internal, Thumb support, Ultra great option that permit almost everything. Support Hardware Acceleration for Xperia Play ! No Lag, Subtitle working greatly (multi sub track works) Opening in anime show all the subtitles : lyrics/translation/japanese
1080p: Laggy
Play every Format and accept stream
Best of the Best

The best video player on Android! Watch any of your videos on a phone without conversion, anytime and anywhere.

We feature the best playback experience and quality.

Our video player supports:
All video formats (need to choose "software decoding" mode in most cases)
Popular subtitle formats such as SRT, ASS, and SAA
Subtitles built in MKV, MPV, MOV, and others
Multi-audio streams and multi-subtitles
Playlists and continuous play on same type files
Videos streamed through HTTP, RTSP protocols
Media libraries and sort videos by type
Thumbnail displays of videos

Changelog Already Added. 5 Star PLZ!! -_-!!!

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Make the best player for Android platform can not satisfy us now! Now we want to develop a perfection software on Android. If you have any suggestions or bugs, you are welcome to notify us by the following ways:
email: mobo@moboplayer.com

This link is only for those who cannot access market ! Remember the app is free and the count is important for the dev! Also there is update made for this tool! you might want the last version ?http://www.megaupload.com/?d=ZUGZK1J4

If someone found another great player and make a review and share it. That would be Great

-------Update May 18: (see post bellow)
Application Compatible and working fine with Xperia Play
I did some other test/comparison on many others program here what I found and chosen per Type:
Note Almost all of them move to SD

And, gotta give you thanks for the heads up on mobo player.
I've been converting all my video files for use with mVideoPlayer. Just tested mobo player with a couple of files (mp4, mkv, wmv & 'video clip'), works a treat, you've saved me a lot of time there.

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